item image
14 Jan 2020

The E-Cigarette Industry’s Legal Troubles

The 2019 National Youth Tobacco Survey reported that 27.5 percent of U.S. high school students claim to use e-cigarettes, a.k.a. “vaping.” That figure was more than double the 11.7 percent recorded just two years earlier. Perhaps even more troubling, five million youth claimed to currently use e-cigarettes, with 1.4 million of those being new users in the past year.

This alarming rise—coupled with an increasing number of reported injuries and deaths related to vaping—has prompted public health officials and other government agencies to label e-cigarette use as a widespread epidemic in the U.S.

For this reason, the five billion-dollar e-cigarette industry is facing legal trouble from all sides—federal investigation, private litigation and growing multi-district litigation, as well as lawsuits brought by state attorneys general.

Federal E-Cigarette Regulation—And Scrutiny

Under the Federal Food, Drug and Cosmetic Act, all e-cigarettes and other electronic nicotine delivery systems (ENDS) must apply for premarket authorization from the FDA before they can be legally marketed. Thus far, the FDA has exercised discretion in deferring enforcement of premarket authorization, as no ENDS products have yet been authorized by the FDA.

As a result, every e-cigarette product on the market today is, technically, illegally marketed and is subject to enforcement by the FDA at any time. The FDA’s recent statements suggest that its deference is quickly coming to an end.

On January 2, 2020, the FDA formally issued a policy which focuses its e-cigarette enforcement activity on marketing and distribution targeted to U.S. adolescents. This, of course, should sound eerily familiar to those of a certain age who recall traditional cigarette marketing facing similar allegations in the 1980s and 1990s. Specifically, the FDA warned that any company failing to cease its manufacture, distribution or sale of unauthorized, flavored, cartridge-based e-cigarettes within three days risks an FDA enforcement action. Additionally, e-cigarette companies are no longer permitted to manufacture flavors other than tobacco or menthol. The popular fruit and mint flavors have been the subject of widespread criticism as being child-friendly, designed to target children and teens.

This policy also requires that all vape manufacturers submit a premarket tobacco application to the FDA for product approval by May 11, 2020. The FDA has emphasized this deadline, stating that after May 11, the agency intends to prioritize enforcement against any e-cigarette product that has failed to submit its premarket application.

In the FDA’s statement, Commissioner Stephen M. Hahn, M.D., articulated the agency’s commitment to vaping-related enforcement, warning that the FDA “will use its full regulatory authority thoughtfully and thoroughly to tackle this alarming crisis that’s affecting children, families, schools and communities,” and that it is “ready to take action against any unauthorized e-cigarette products as outlined in [its] priorities.”

The FDA is not the only federal entity participating in this crackdown. The Federal Trade Commission, the U.S. House of Representatives and the U.S. Senate have all launched their own investigations. And President Donald Trump recently signed legislation raising the legal age to purchase tobacco products, including e-cigarettes, to 21.

The Centers for Disease Control and Prevention has also chimed in, issuing warnings about the safety of vaping and vaping products, reporting more than 2,500 illnesses and 55 deaths nationwide connected to ENDS products. 

Ongoing E-Cigarette Litigation with a Multitude of Plaintiffs

Though the nicotine delivery system is new, the plaintiff’s bar already has a tried and true litigation playbook, developed over many years of battling tobacco companies over many of the same public health issues present in vaping. And for small and midsize personal injury firms that weren’t around for the tobacco litigation boom, the products liability and catastrophic injury causes of action present in vaping-related claims make the emergence of e-cigarette litigation a significant opportunity to build and grow a niche practice area.

In addition to federal scrutiny, market leader JUUL Labs, Inc., and its largest shareholder, Altria Group (the parent company of Philip Morris), have been the subject of mounting litigation, including multiple class actions, individual lawsuits and, recently, suits filed by state attorneys general.  

The rise of litigation against JUUL, as well as smaller manufacturers and distributors, has been so significant that some law firms have created entire practice areas addressing e-cigarette/vape litigation. Plaintiffs’ attorneys report having hundreds of clients interested in pursuing legal action against JUUL. Some claim to be receiving upwards of 20 to 50 vape-related calls every day.

To date, JUUL has been named in dozens of civil lawsuits and numerous class actions, including at least 55 federal lawsuits in 25 states. These lawsuits generally allege false advertising and labeling, claiming that JUUL misled its customers to believe its e-cigarettes were less addictive than traditional cigarettes.

Due to the number of lawsuits pending in federal court, in October 2019 the United States Judicial Panel on Multidistrict Litigation ordered the consolidation of these suits into a single MDL venued in San Francisco federal district court.

The states of California, New York and North Carolina have also filed lawsuits against JUUL for deceptive and misleading marketing targeting underage consumers, failure to warn consumers of the levels of nicotine and other harmful chemicals in its products, and selling its products to minors without proper verification of age. California Attorney General Xavier Becerra announced that California’s suit follows a 21-month investigation into JUUL’s marketing and sales practices. And, in October 2019, New York Governor Andrew Cuomo exercised his authority to issue an emergency executive action banning the sale of flavored e-cigarettes in New York state.

JUUL’s Response

In response to its mounting legal troubles, JUUL has said that it “remain[s] focused on resetting the vapor category in the U.S. and earning the trust of society by working cooperatively with attorneys general, regulators, public health officials and other stakeholders to combat underage use and convert adult smokers from combustible cigarettes.” 

These mounting legal troubles and public backlash have apparently compelled JUUL to change some of its business practices. It no longer accepts orders for its mint and fruit-flavored “JUULpods,” and it has suspended all broadcast, print and digital product advertising in the United States. JUUL also launched a track-and-trace program, intended to reduce teen vaping by requiring each retailer to scan a customer’s government identification before selling a JUUL product.

A New Industry Fights for Its Life

The e-cigarette industry has exploded in the United States in recent years, growing almost as quickly as the legal troubles and public backlash it now faces. It remains to be seen whether the industry can survive being a victim of its own success.